Statistics and local economic reports, show that many micro-projects in Saudi Arabia, particularly small kiosks, generate a large annual income for their expat ‘owners', in the absence of Saudi investors who do not realize their importance. Although the regulations do not allow foreigners to own such businesses, many citizens have addressed this by obtaining the necessary commercial permits and ‘selling' them for minuscule amounts. Economists have called for a review of the regulations and called on the authorities to encourage young people to invest in these enterprises instead of expats. This would ensure the billions of riyals these kiosks generate would stay in the Saudi economy. Abdul Aziz Al-Hemaid, a member of the national commercial committee, told business daily Al-Eqtisadiah, “Small shops and kiosks should be included in the different funds established to encourage young people to set up businesses. At the moment they can't compete because of the fierce competition from expats.” Al-Hemaid carried out a study of 2,000 small grocery stores. He reported annual sales reach of one billion riyals and net profits of 200 million riyals, most of which was immediately transferred abroad. Al-Hemaid said that a proposal was put forward to limit licensing of grocery shops and kiosks only to young Saudis who have a desire to work there, rather than those who pass on the daily running to surrogate expat owners. He added that young people could use these kiosks and shops as a springboard to larger more ambitious projects. He also wants to see more communication of the support available from start up funds for young entrepreneurs in the Kingdom. Hassan Asiri, vice president of the Young Businessmen Committee at the Jeddah Chamber of Commerce and Industry (JCCI), said, “Our studies show that this is a large but marginalized sector typically ignored by young businessmen, even though they require small amounts of capital.” He added that 90 percent of the sector is owned by expats labor, where each kiosk generates from SR6,000-SR10,000 per month. Nonetheless Asiri did acknowledge that unsociable working hours, crippling rent increases from mall owners and access to finance were genuine obstacles which young Saudis would have to contend with. With regards the issue of finance, he pointed out that the National Committee of Young Businessmen is lobbying for a change in legislation to make it easier for young people to get the necessary funding with more agreeable terms. Ayman Jamal, chairman of the Young Businessmen Committee, said that the organizational and monitoring aspects of the sector need to be reviewed, while limiting foreign workers who compete with citizens. He continued that the problem is not with the foreign labor per se but with some citizens who grant them the opportunity to earn large monthly incomes for very little upfront investment. Khalid Al-Hamdan, a member of the National Commercial Committee, said that the sector needs new government legislation to empower and encourage young people to invest in these shops. He added that better regulation should help reduce the amount of foreign workers in this lucrative sector.
